Climb down on bare trusts for children

If you are still feeling confused as to what exactly the changes to trust taxation announced in budget 2006 mean in practical terms, then don't take it to heart. HMRC are still in a conundrum themselves as evidenced by the latest episode of the saga of the FA 2006 changes concerning children's trusts.

The CIOT and ICAEW recently discovered that HMRC had formed the option that bare trusts for minor children were actually accumulation and maintenance trusts and so any transfer into such a trust was therefore a chargeable lifetime transfer.